Capital Property Partners

02/02/2024

As expected, the Bank of England has followed the example of the ECB and Fed and voted in favour of holding its base rate.

The BoE’s Monetary Policy Committee voted to hold rates at their September level of 5.25%, after raising the base rate 14 times from its 0.1% historic low in December 2021.

With inflation at 4% – twice the BoE’s 2% target – there was clearly little appetite for easing policy.

In fact the only surprise from the Bank’s announcement was the fact that two members of its MPC voted for a rate increase, with only one voting for a cut. The first three-way split for quite some time.

Commenting on the BoE decision to stick at 5.25% Paresh Raja, CEO of Market Financial Solutions, said: “The Bank of England continues to walk a tightrope. Sticky inflation is making them hesitant to cut rates, but a rise in company insolvencies and the general impact of a higher cost of borrowing on the UK economy is piling on pressure to drop the base rate”.

“Either way, we now know the base rate has almost certainly peaked, and it is just a matter of time before it comes back down. This shift has already started to have an impact on lenders and the property market in recent months. Mortgage, bridging and BTL rates all have started to fall, and there are the green shoots of recovery emerging after two challenging years, with early signs suggesting buyer demand and house prices are picking up.

22/01/2024

North East tops the UK for best places to invest
When it comes to regions, the top places for rental yields are all northern.

Rents in the North East are cheaper than anywhere else in the country (£671) - but so are buy-to-let properties, at £109,715 on average. This gives the region the highest average yield in the UK of 7.34%.

It’s followed by Scotland (7.32%), the North West (6.52%), Northern Ireland (6.24%) and Wales (6.23%).

London offers the lowest gross yields in the UK of 4.92% on average. With higher mortgage rates, new regulations and low house price growth in recent years, landlord investment in the city has been limited. Particularly as rents appear to have reached an affordability ceiling and tenant demand is starting to moderate.

Its also worth noting that at Capital Property Partners we regularly source properties at 9-11% yields.

This is due to our extensive local knowledge and many years of experience

Thanks
Chris

20/01/2024

UK inflation increased unexpectedly in December for the first time in 10 months, causing a heavy sell-off in gilts and traders to scale back expectations of how soon the Bank of England will start cutting interest rates.

Consumer prices rose at an annual rate of 4 per cent in December, up from 3.9 per cent in November, the Office for National Statistics said on Wednesday.

The reading — double the BoE’s inflation target — was driven by increases in alcohol and to***co prices and exceeded the 3.8 per cent forecast by economists in a Reuters poll.

The figure marked the first increase in price rises since February last year and led traders in the swaps market — which reflects predictions of the future level of BoE interest rates — and some economists to scale back expectations for rate cuts this year.

“The data today will make the BoE’s Monetary Policy Committee more cautious,” said Tomasz Wieladek, chief European economist at investment company T Rowe Price. “We could see rate cuts at a pace of once per quarter rather than once per month.”

The FTSE 100 index tumbled 1.8 per cent as the prospect of early rate cuts receded.

Interest rate-sensitive 2-year gilt yields rose 0.16 percentage points to 4.3 per cent, the biggest daily rise since August. Benchmark 10-year gilt yields rose 0.14 percentage points to 3.94 per cent, the highest level since December 13.

The market-implied probability of the first interest rate cut coming in May fell to 55 per cent, from more than 80 per cent ahead of the ONS figures. Traders are pricing 1.04 percentage points of cuts in 2024, down from 1.24 percentage points earlier on Wednesday.

15/01/2024

Santander and Barclays are the latest amongst high street lenders to cut their rates on mortgage products this week. Rates had increased over the past year and a half In response to the bank of Englands increase in the base rate.

The central bank has held interest rates at 5.25 per cent which have remained at this level for the last three months as inflation has eased.
Banks and building societies have been slashing mortgage rates recently, including Santander and Barclays, which were included in Moneyfacts “Pick of the Week”.

Santander cut the rates of several buy-to-let products this week, including its two-year fixed rate deal which offers 4.64 per cent.
Remortgage customers are able to choose between free legal fees or £250 cashback with a free valuation incentive being included.

There is a product fee of £1,749 attached to this deal can be added to the mortgage advance which is deal for those looking to save on any upfront costs.

In comparison, Barclays Mortgage has reduced its two-year fixed rate mortgage at 60 per cent loan-to-value (LTV) which is now priced at 4.36 per cent.

“The volatility surrounding mortgage rate pricing eased, as the average mortgage shelf life rose from 17 days to 21 days, the highest figure recorded in over six months.

“There are big expectations for fixed mortgage rates to fall in the coming weeks, so some borrowers may choose to wait patiently for the right time to change their deal or buy their first home.”
Despite this trend of mortgage rate cuts, the base rate is not expected to come down until the later half of 2024.

Bank of England Governor Andrew Bailey said he hoped the “big change” to mortgage interest rates will continue to fall throughout the year when appearing before the Treasury committee earlier this week.

Source GB News

22/09/2023

Great news regarding EPCs

Landlords will no longer be fined if they do not upgrade their properties to EPC C or higher by April 2025.

Around five million households who can least afford replacing their old gas boiler with an energy efficiency device such as a heat pump when the rule kicks in after 2035 will also be spared the requirement.

However, Sunak increased the boiler upgrade scheme, which provides grants to replace fossil fuel boilers, from £5,000 to £7,500.

The prime minister also delayed a ban on new petrol or diesel cars by five years to 2035, a move which Labour says it will reverse.

Rishi Sunak has confirmed the weakening of the UK Government's green policies. The Prime Minister said the ban on sales of new petrol and diesel cars would b...